Another day, another LePage welfare ‘reform’ boondoggle

Christopher Cousins | BDN

Christopher Cousins | BDN

Gov. Paul LePage

May 15, 2014 12:16 pm

On Monday, the LePage administration announced the Department of Health and Human Services has begun blocking electronic benefits transfer card use at ATMs in or near bars, liquor stores, gambling facilities and places that offer adult entertainment, such as strip clubs. It plans to ultimately prohibit use of the EBT cards — which may hold federal Temporary Assistance for Needy Families program benefits — at more than 200 such ATMs across the state.

Under a bill that Gov. Paul LePage signed into law in 2012, it’s already illegal for people to use their EBT cards at these types of facilities. Congress also passed a law in 2012 requiring states to prevent TANF benefits from being used at liquor stores, casinos and adult-entertainment venues. But it has never been entirely clear how states could realistically enforce such laws.

That’s because TANF benefits are essentially cash. They are intended to help low-income households — most of which have children or people with disabilities — pay for basic living expenses, such as shelter, transportation and utilities. Food stamps benefits may also be stored on EBT cards and used to purchase food, but they have more restrictions than TANF benefits.

LePage plans to bar people from being able to use their EBT cards at ATMs near liquor stores, casinos and strip clubs, to prevent them from withdrawing cash that they could then spend on booze, time at a slot machine or strippers. It may sound reasonable. For a public welfare program to remain strong, it’s important for the public to believe in its integrity.

But there is no depth to LePage’s scheme. Putting a block on certain ATMs will do little to help enforce the law.

For one, TANF recipients can still withdraw cash at banks or ATMs that aren’t near a bar, casino or strip club. And while the LePage administration is fond of pointing out some suspect locations where TANF cash has been withdrawn in Maine, it doesn’t know what the money was spent on. LePage is pursuing this ATM ban without first documenting a clear need for it, and he has no way of ultimately tracking whether it cuts down on unauthorized use of TANF funds.

Plus, it’s cumbersome to institute bans. A 2012 report by the U.S. Government Accountability Office examined several states that disabled EBT use at ATMs in “prohibited” locations and found the work was time-consuming and expensive.

Officials in California, for instance, had to manually search thousands of EBT transaction records for business names that appeared to fit the prohibited categories — such as “beer,” “wine” and “spirit.” There was no good way to determine the nature of each retailer unless the name explicitly put it into one of the prohibited categories.

California officials then searched the Internet to verify the potential location to be blocked. Internet searches, however, were time-intensive and not always accurate, since satellite photos were often a couple years old. It was also challenging to identify which locations to target because the EBT transaction data often misspelled addresses or only provided the address of the corporate office or the financial institution, not the retail store.

California also had no way to know which ATMs were potentially in a prohibited location unless someone used an EBT card there; they could not know all the potential places to ban. Not to mention, businesses can always change their ATM location or configuration.

There are fewer ATMs in Maine than California, but that doesn’t make LePage’s plan more reasonable. When DHHS staff must spend time figuring out which ATMs should and shouldn’t be prohibited — to essentially accomplish nothing — they have less time to actually help low-income families. Do people worry about the integrity of the EBT card program in Maine? We think they should be more concerned with the integrity of their government, which must know it’s a waste to block EBT use at ATMs but is expending time, energy and taxpayer money to do so nonetheless.

Those in LePage’s administration like to say the only acceptable amount of welfare fraud is zero. Certainly no one condones fraud. But the administration is spending time and money on an initiative that’s meaningless.